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Brasil Foods Sees Revenues Rise

BRAZIL - Brasil Foods - BRF - saw net sales reach R$ 7.2 billion, an increase of 14.3 per cent over the same period of last year and 5.1 per cent higher than the second quarter of 2012.

The EBITDA margin was 7.9 per cent of company´s net sales and EBITDA total amount of R$ 565 million.

During the third quarter, the company fulfilled the agreement signed with the Brazilian anti-trust agency (CADE) and concluded one of the most important stages of the merger process. As expected by the company, this transitory process combined with the world economic situation impacted the results in the quarter.

Nevertheless, BRF achieved very positive revenues in its operating segments in the third quarter, with an expansion of 7.4 per cent on the domestic market, 26 per cent in exports, 4.8 per cent in dairy products and 8 per cent in food service. There was an increase of 4.3 per cent in sales volume which amounted to 1.6 million tons.

The price increase adjustments partially reduced the pressure from the costs of the main raw materials on the operating margins in the third quarter. However, the impacts were still significant as the costs of corn, for example, increased by as much as 26.3 per cent in the period over the second quarter of this year.

The EBITDA margin fell by 3.6 percentage points in the quarter. Gross profit amounted to R$ 1.5 billion, a decline of five per cent, and net income was R$ 90.9 million, 75 per cent lower than the third quarter of 2011.

During the year, 283 products were launched in order to expand the portfolio, to reposition brands and/or categories and adding value. There was 115 product launches in the third quarter, distributed as follows: Food Service – 18, domestic market – 51; export market – 31; and dairy products segment – 15.

Domestic market sales came to R$ 3.1 billion in the quarter, 7.4 per cent higher than the same period of the previous year. Revenues came to R$ 9 billion, with volumes remained essentially stable.

Revenues from exports came to R$ 3.1 billion, an increase of 26 per cent over 3Q11. The highlight was the Middle East where revenues expanded by 46.5 per cent.

Despite the adverse outlook -- greater supply of hogs and poultry registered during the year in imported countries, along with the high cost of grains -- 628,300 tons were shipped, a volume 11.7 per cent higher.

Revenues expanded by 12 per cent in accumulated terms for the year to R$ 8.2 billion and volumes rose by 10 per cent to 1.85 million tons.

Revenues in the dairy segment rose by 4.8 per cent to R$ 692.3 million in the third quarter while the accumulated figure grew by six per cent to R$ 2 billion.

Batavo, the company portfolio brand, is currently the third in the yoghurt market with a share of 10.9 per cent. The launch of Pedaços, a yogurt with up to 10 times more fruit than similar ones, expanded the brand by 3.4 points in the cups category between April and September this year (Nielsen figures). This performance highlights the alignment of the dairy area with the market trend to adding value to its products.

The Food Service area grew in terms of revenues and volume. Sales were 8 per cent higher and amounted to R$ 354 million while volumes rose by 2.6 per cent. Accumulated volumes expanded in the year by 6 per cent and accumulated revenues by nine per cent to R$ 1 million.